Seven in Galleon case plead not guilty

Former stock trader Zvi Goffer, dubbed Octopussy in the sprawling Galleon hedge fund insider trading case, pleaded not guilty on Tuesday along with six others to securities fraud charges.

The seven, traders and lawyers, appeared before Manhattan federal court Judge Richard Sullivan to answer an indictment unsealed on January 21, charging them with securities fraud and conspiracy to commit securities fraud.

They were arrested November 5, 2009, weeks after U.S. prosecutors arrested and charged Galleon hedge fund founder Raj Rajaratnam in the case.

The probe, described by prosecutors as the biggest hedge fund insider trading case in the United States, targeted companies and employees from Wall Street to Silicon Valley.

Goffer once worked at Galleon and later at the Incremental Capital trading firm. A U.S. Securities and Exchange Commission civil complaint described him as being nicknamed Octopussy in the purported insider trading network because of the breadth of his sources.

Aside from Goffer, the others who pleaded not guilty on Tuesday were three others associated with Incremental: Zvi Goffer's brother Emanuel Goffer, Michael Kimelman and David Plate; Arthur Cutillo, who had been a lawyer at Ropes & Gray LLP; and another lawyer, Jason Goldfarb.

Also indicted was Craig Drimal, whom prosecutors said worked in Galleon's offices but was not employed there.

The case is USA v. Goffer et al, U.S. District Court for the Southern District of New York, No. 10-056.